Wednesday, August 25, 1999 Published at 10:30 GMT 11:30 UKWorld: EuropeBid to bridge Nazi slave fund rowVolkswagen is among the companies which used slave labourTalks aimed at bridging the gap between compensation demanded by former Nazi slave labourers and the sum on offer resume in Bonn.

But the reported demands by Holocaust survivors for a $20bn fund were "very far removed from reality", Germany's chief negotiator Otto Graf Lambsdorff told German television on Tuesday.

Graf Lambsdorff: $20bn "very far removed from reality"

Without giving concrete figures, he said any settlement would not lie "in the middle" between the $20bn sought by the victims' lawyers and the $1.7 bn proposed by the firms contributing to the fund.

But US Deputy Treasury Secretary Stuart Eizenstat, who is co-hosting the talks, was hopeful that a compromise could be reached between the two sides.

"This is the first session where we're talking about money," he said. "I think we'll narrow the differences."

On Thursday the governments of Israel and
east European countries are due to join the talks.

Top companies

There are 16 firms - some of the giants of German industry - offering the $1.7bn dollar compensation package. Amongt them are BMW, BASF, DaimlerChrysler, Volkswagen, Siemens and Deutsche and Dresdner Banks.

But lawyers representing the survivors say that with more than one million claimants on their books, less than $2bn is simply not enough.

A concentration camp victim shows her identification tattoo

For their part, the companies want a guarantee that if a deal is signed they will be protected from any further claims and that has proved a sticking point.

The survivors have maintained that German industry was central to the so-called Final Solution and that many firms actually profited from the Holocaust - a claim industry has always denied.

A spokesman for the companies acknowledged that they had a moral duty to help, but they bore no legal responsibility. The spokesman said the blame lay with the Nazi government.

Germany has already paid more than DM100bn ($54bn) to Holocaust victims for their suffering, but back pay for slave labour was left to the companies to resolve.

Running out of time

The German Government had originally hoped to have an agreement
by 1 September - the 60th anniversary of the start of World War II. The
companies also pledged in February to have a fund in place by next week.

Meanwhile, the number of Holocaust survivors is continually reducing as elderly victims die before the compensation issue is resolved.